Mosman Oil and Gas unveils plans to drill five new wells

"The way forward is clearly to build production,” said John Barr, Mosman chairman

At the same time Mosman is raising around £500,000

Mosman Oil And Gas Limited (LON:MSMN) told investors that it intends to continue the rapid development of its US projects, as it proposes drilling up to five new wells.

Following on from the successful Stanley-1 well, it is now planned that three additional wells will be drilled at the Stanley project, meanwhile, one well will each be drilled at the Champion and Challenger projects.

The company noted that the Stanley-2 well is already funded, as are the other Stanley wells.

They will be drilled under lease with each single well drilling operation committed to and completed one at a time, with each well likely every two months. The programme will be carried out alongside strategic partner Baja Oil and Gas LLC.

Mosman is at the same time raising around £500,000 of new capital with new shares being sold to investors through a placing. Some 141.81mln shares are being sold to investors, at 0.275p each, to raise £390,000 and another £110,000 will be raised as two company directors also subscribe for shares.

Further funding will be required for the Champion and Challenger and options are being considered.

"The way forward is clearly to build production,” said John Barr, Mosman chairman.

More drilling at Stanley project

“Mosman has determined the next step is further drilling at Stanley where Stanley-1 is already a producer.

“If the additional proposed development drilling is commercially successful this will increase production to further enhance the growth potential of the company.”

Barr added: "The selection of the proposed wells is designed to maximize the potential of Mosman and also deliver the best possible economic outcome.

"Mosman remains fully supportive of its other projects in the portfolio, however, the low cost and strong economics of investing in these wells was a significant factor in deciding the next step for the company."

Mosman, also, updated on the Welch project where a feasibility study indicated the well would be economic, but, now, the company noted that cost estimates have increased to US$2mln per horizontal well.

The company said it intends to seek farm-in funding and preliminary talks are presently underway.

Meanwhile, in Australia, the company’s partner intends to drill the ‘key’ Dukas well in the first quarter of 2019.

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